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BlackRock (BLK) Acquires SpiderRock, Boosts SMA Offerings
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BlackRock Inc. (BLK - Free Report) has completed the acquisition of SpiderRock Advisors, LLC, which is a leading provider of option overlay-based strategies for separately managed accounts (SMAs). This strengthens the company’s capabilities to provide a robust platform to its clients with customized SMA solutions.
SpiderRock will be integrated into BlackRock’s U.S. Wealth Advisory business, which managed $186 billion in U.S. Wealth SMAs as of Dec 31, 2023.
Eve Cout, head of the Portfolio Design & Solutions pillar of BlackRock’s U.S. Wealth Advisory business, said, “SpiderRock complements BlackRock’s existing SMA product portfolio and the completion of this acquisition further enhances our ability to provide wealth managers with an extensive array of customization capabilities. With SpiderRock's advanced option overlay capabilities and derivatives expertise, we are positioned to deliver even greater value to our clients, helping them towards achieving better after-tax performance and personalization.”
This acquisition (announced in March 2024) is an extension of BLK’s minority investment of 25% in the firm in 2021 and reinforces its commitment to personalized SMAs. The financial terms of the deal remained undisclosed and the impact of the acquisition will be immaterial to 2024 earnings.
Given the diverse and unique features of the offerings, the deal is expected to boost BLK’s SMA solutions to meet the increased demand for personalized, tax-efficient portfolios by wealth managers.
SMAs are one of the rapidly growing product segments in the U.S. wealth industry. Per Cerulli Associates, SMAs are expected to grow to $4 trillion in assets under management (AUM) by 2026 from $2.7 trillion as of Sep 30, 2023. The primary growth driver boosting the demand for SMAs is increased client requirements for customized portfolios to derive tax benefits and value alignments to achieve their investment objectives.
This acquisition complements the Aperio acquisition, which was executed in 2021, thus further expanding the SMA offerings to fulfill unique client requirements. SpiderRock’s diverse pool of offerings fits into Aperio’s pioneer consultative client services.
BlackRock has been actively pursuing opportunistic buyouts to expand inorganically. This January, the company agreed to acquire Global Infrastructure Partners for a total consideration of $3 billion in cash and roughly 12 million shares. Through this deal, the company seeks to deliver clients a market-leading, holistic infrastructure expertise across equity, debt and solutions at a substantial scale. Moreover, the company acquired Kreos Capital in August 2023 to boost its presence in private credit.
Over the past six months, shares of BlackRock have gained 16.6% compared with the industry’s 25.4% growth.
Last month, Blue Owl Capital Inc. (OWL - Free Report) entered into an agreement to acquire Kuvare Insurance Services LP, doing business as Kuvare Asset Management (“KAM”), for $750 million. The transaction, expected to be closed in the second or third quarter of 2024, subject to regulatory approvals and other closing conditions, will likely be accretive to the company’s financials this year.
The deal will add approximately $20 billion of AUM to OWL. As of Dec 31, 2023, the company had $165.7 billion in AUM. Further, the acquisition will supplement the launch of Blue Owl Insurance Solutions.
Similarly. this February, Blackstone Inc. (BX - Free Report) announced the acquisition of credit card receivable for its credit & insurance segment, approximating $1.1 billion from Barclays PLC (BCS - Free Report) .
Under the transaction, BCS will enter into a long-term strategic forward flow sale and servicing arrangement with Blackstone related to the accounts. BX’s investments will be made entirely on behalf of the firm’s insurance clients.
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BlackRock (BLK) Acquires SpiderRock, Boosts SMA Offerings
BlackRock Inc. (BLK - Free Report) has completed the acquisition of SpiderRock Advisors, LLC, which is a leading provider of option overlay-based strategies for separately managed accounts (SMAs). This strengthens the company’s capabilities to provide a robust platform to its clients with customized SMA solutions.
SpiderRock will be integrated into BlackRock’s U.S. Wealth Advisory business, which managed $186 billion in U.S. Wealth SMAs as of Dec 31, 2023.
Eve Cout, head of the Portfolio Design & Solutions pillar of BlackRock’s U.S. Wealth Advisory business, said, “SpiderRock complements BlackRock’s existing SMA product portfolio and the completion of this acquisition further enhances our ability to provide wealth managers with an extensive array of customization capabilities. With SpiderRock's advanced option overlay capabilities and derivatives expertise, we are positioned to deliver even greater value to our clients, helping them towards achieving better after-tax performance and personalization.”
This acquisition (announced in March 2024) is an extension of BLK’s minority investment of 25% in the firm in 2021 and reinforces its commitment to personalized SMAs. The financial terms of the deal remained undisclosed and the impact of the acquisition will be immaterial to 2024 earnings.
Given the diverse and unique features of the offerings, the deal is expected to boost BLK’s SMA solutions to meet the increased demand for personalized, tax-efficient portfolios by wealth managers.
SMAs are one of the rapidly growing product segments in the U.S. wealth industry. Per Cerulli Associates, SMAs are expected to grow to $4 trillion in assets under management (AUM) by 2026 from $2.7 trillion as of Sep 30, 2023. The primary growth driver boosting the demand for SMAs is increased client requirements for customized portfolios to derive tax benefits and value alignments to achieve their investment objectives.
This acquisition complements the Aperio acquisition, which was executed in 2021, thus further expanding the SMA offerings to fulfill unique client requirements. SpiderRock’s diverse pool of offerings fits into Aperio’s pioneer consultative client services.
BlackRock has been actively pursuing opportunistic buyouts to expand inorganically. This January, the company agreed to acquire Global Infrastructure Partners for a total consideration of $3 billion in cash and roughly 12 million shares. Through this deal, the company seeks to deliver clients a market-leading, holistic infrastructure expertise across equity, debt and solutions at a substantial scale. Moreover, the company acquired Kreos Capital in August 2023 to boost its presence in private credit.
Over the past six months, shares of BlackRock have gained 16.6% compared with the industry’s 25.4% growth.
Image Source: Zacks Investment Research
Currently, BLK carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Acquisitions by Other Asset Managers
Last month, Blue Owl Capital Inc. (OWL - Free Report) entered into an agreement to acquire Kuvare Insurance Services LP, doing business as Kuvare Asset Management (“KAM”), for $750 million. The transaction, expected to be closed in the second or third quarter of 2024, subject to regulatory approvals and other closing conditions, will likely be accretive to the company’s financials this year.
The deal will add approximately $20 billion of AUM to OWL. As of Dec 31, 2023, the company had $165.7 billion in AUM. Further, the acquisition will supplement the launch of Blue Owl Insurance Solutions.
Similarly. this February, Blackstone Inc. (BX - Free Report) announced the acquisition of credit card receivable for its credit & insurance segment, approximating $1.1 billion from Barclays PLC (BCS - Free Report) .
Under the transaction, BCS will enter into a long-term strategic forward flow sale and servicing arrangement with Blackstone related to the accounts. BX’s investments will be made entirely on behalf of the firm’s insurance clients.